Greenpeace UK — Written Evidence (ARC0016)

Summary

• The Arctic remains one of the world’s most valuable and pristine natural regions: 30 million km2 of ocean and terrestrial environments with huge wilderness areas, millions of breeding migratory birds, and many charismatic species
• The Arctic is also home to more than 4 million people with rich cultural diversity
• The region is at a critical threshold: extraordinary rates of environmental change, climate tipping points, and increasing human activity all have global significance.
• Most alarming is the viciously spiraling decrease in the extent of Arctic sea ice: the lowest summer sea ice extent ever recorded (3.41m sq. km2) was on 16th September 2012[1], the previous record was established in 2007 (4.13 million km2) [2].
• The Arctic is critical for the global climate system.  Melting sea ice, glaciers, and the Greenland ice sheet could trigger disturbances in the world ocean circulation systems, generate dangerous sea level rise, and could trigger dramatic and irreversible climate change globally.
• Oil and gas companies are increasingly turning towards the Arctic Ocean as a potential source of hydrocarbons, despite the remoteness and investment risk.
• Greenpeace recommends that UK Government conducts a formal analysis of the compatibility and consistency of its climate objectives in the context of oil extraction in the Arctic.
• There remain significant questions about whether an oil find in the Arctic seas could be profitable.
• Preventing highly disruptive climate change will necessitate reducing oil demand and result in lower oil prices.
• These changes would likely undermine extraction from expensive, remote and marginal oil fields such as offshore in the Arctic.
• Drilling conditions facing oil companies operating in the Arctic are some of the most challenging on Earth.  The hostile weather, freezing conditions and remote location all present unprecedented challenges.
• The consequences of a spill would be much more severe than in temperate waters: the Arctic is a critical habitat for endangered and threatened species which are already stressed, such as polar bears, whales, seals, and migratory birds.
• The US Government estimated that there is a 40% chance of a large spill (over 1000 barrels) during the lifetime of exploration and extraction of oil in the Chukchi Sea.  The probability of small spills is 100%.
• “There is no comprehensive method for clean-up of spilled oil in sea ice”, according to US Geological Survey.
• Arctic fisheries management is fragmented and inadequate - currently based on bilateral arrangements between Arctic states and patchy coverage by several regional fisheries management organisations (RFMOs). 
• All available science says the region is vulnerable to overfishing and may be slow to recover. 
• Communities in the Arctic will need to pursue a path to economic development, as well as preserving traditional livelihoods and lifestyles.  UK Government and private sector participation in development is welcome, but in the context of developing a sustainable trajectory of development for local populations.
• In Greenland, even without offshore extraction of oil and gas, but with careful management, the sectors of tourism, fisheries, agriculture, as well as sustainably implemented mining projects, and the sustainable exploitation of seal products, may potentially grow by 3.8% annually towards 2025 (total growth of 56%), creating lasting, locally-based jobs. 
• The current international governance and security arrangements are not appropriate for dealing with current and anticipated challenges in the Arctic.
• An international approach is needed to address these gaps; there is an urgent need to rethink the current governance structures. 
• To this end, Greenpeace has proposed an Arctic Sanctuary to form the cornerstone of a strong governance framework that is needed to ensure the protection of this fragile marine area. The Sanctuary is a highly protected area (or marine reserve) that will be off-limits to all extractive and destructive uses, covering the central Arctic Ocean beyond the 200 nautical mile limit of Arctic coastal states’ exclusive economic zones.

Introduction

1.      The Arctic remains one of the world’s most valuable and pristine natural regions: 30 million km2 of ocean and terrestrial environments with huge wilderness areas, millions of breeding migratory birds, and many charismatic species including whales, walrus, seals, narwhal and polar bears.  It is among the most biologically productive places on earth in summer months.  The Arctic is also home to more than 4 million people with rich cultural diversity and heritage. It is also seen by many as resource-rich, in resources such as fossil fuels and fisheries.

2.      The region is at a critical threshold: its extraordinary rates of environmental change, climate tipping points, and increasing human activity all have global significance.  Most alarming is the viciously spiralling decrease in the extent of Arctic sea ice: the lowest summer sea ice extent ever recorded (3.41m sq. km2) was on 16th September 2012[3], the previous record was established in 2007 (4.13 million km2)[4].  This radical change is opening up the international waters of the central Arctic Ocean to the threat of oil exploration, ship traffic, and large-scale industrial fishing.

3.      The Arctic is critical for the global climate system.  Melting sea ice, glaciers, and the Greenland ice sheet could trigger disturbances in the world ocean circulation systems, generate dangerous sea level rise, and could trigger dramatic and irreversible climate change globally.  The Arctic, with 50-60%[5] of world’s total carbon pools (plants, soils, oceans, coal, oil and methane), could be the source of massive and unpredictable releases of carbon[6] that would disrupt the dynamics of the world’s climatic systems and creating significant threats to many communities and society.

4.      The solutions to the issue of climate change are global.  However, what happens in the Arctic affects the world.  Given the potential for the Arctic to become a major source of carbon and accelerated warming (through the albedo effect, changes to ocean circulation, melting permafrost and methane hydrates, etc.) the Arctic both provides strong incentives for global action, and specific problems that will require regional solutions.

Sea Ice Changes

5.      The majority of the central Arctic Ocean basin is currently permanently ice covered for much of the year.  At its maximum (in March) sea ice covers almost 8.5 million km2 of the Arctic Ocean.  Satellite observations from 1973-76 (NASA 1987) show that permanent ice used to occupy 70-80% of the entire Arctic basin (14m km2), and differences between years was small: about 2%.[7] Today however the loss of ice is increasing every year in both summer and winter:  peak loss rates in summer now exceed 11% per decade, and are rising rapidly.[8] Much of the original multi-year pack ice has in recent years been replaced by seasonal (1 year old) ice.[9]  Peer reviewed studies project that Arctic summer sea ice will completely disappear within 30-40 years at the latest, jeopardising ice-dependent species such as seals, polar bears and walrus, and changing ocean circulation.[10]  This loss of permanent ice cover will result in radical and fundamental changes in the productivity, functional relationships and biodiversity of the high Arctic Ocean ecosystems.[11] 

6.      As the ice melts, the ice-albedo positive feedback loop risks accelerating warming, leading to a potential ‘death spiral’ for the ice and risking additional releases of large volumes of methane trapped in the region’s permafrost.  These changes will not just have regional impacts but could also have knock-on effects for the global climate, though the extent and significance of these is still under debate.[12]

7.      The decline in sea ice is of course variable year on year, but overall trends show a significant decline[13]:

Source: National Snow and Ice Data Center, University of Colorado, Boulder[14]

Carbon

8.      The Arctic is one of the largest carbon stores on the planet, both in the terrestrial and marine environments[15]: more than twice as much carbon than is currently contained in the atmosphere is stored in the Arctic permafrost. At present the Arctic Ocean takes up carbon dioxide, comprising 5–14% of the global CO2 sink, and therefore has an important influence on the global carbon cycle.[16]   In the marine realm the volume of methane hydrates and submarine permafrost is enormous. It has been estimated that not less than 1,400 Gt of Carbon is presently locked up as methane and methane hydrates under Arctic submarine permafrost.[17]  Less is known about the distribution of these stocks of carbon in the Central Arctic Ocean basin, but it may also represent an enormous carbon sink.

9.      The capacity of the Arctic Ocean to uptake CO2 is however expected to alter in response to environmental changes. One such change is the rapidly increasing acidification of the ocean.[18] The Arctic Ocean has experienced long-term declines in the seawater pH and it is expected that the ocean and marine life will continue to experience significant rates of change.[19] The Arctic Ocean is especially vulnerable to ocean acidification because of the large amounts of fresh water from rivers and melting ice makes it less effective than more saline waters in neutralising the acidifying effects of CO2.[20] Also the colder waters are more effective in absorbing CO2 from the air.[21]

10.  These increasing acidifying waters are likely to have both direct and indirect effects on marine life. In terms of direct effects ocean acidification hinders shell formation of marine creatures as well as slowing down growth rates. These changes could affect the food supply of the Arctic Ocean for both birds and mammals, as their food sources decline, relocate, change or even expand in response to ocean acidification.[22]

Oil and Gas

11.  Oil and gas companies are increasingly turning towards the Arctic Ocean as a potential source of hydrocarbons, despite the remoteness and investment risk. Arctic Ocean fossil fuel extraction falls into a similar category as hydraulic fracturing, mining and in-situ exploitation of Canadian tar sands, and deep water drilling in the Gulf of Mexico, the Golden Triangle and the pre-salt off the Atlantic coast of Brazil - all represent oil exploration and production on the frontiers, and at the high end of extraction cost curves.[23]

Figure: Most Significant Oil Provinces

Source: The Carbon Tracker Initiative[24]

12.  In a period of rapid economic growth in emerging economies (particularly China, India and Latin America), and a presumption of ongoing growth in oil demand, there has been a strongly held assumption that there is significant oil (and gas) available for extraction in the Arctic, based on preliminary studies conducted by the United States Geographical Survey (USGS).[25]

13.  In this often quoted survey, the USGS concluded that about 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil may be found in the area north of the Arctic Circle, mostly offshore under less than 500 meters of water. This estimate for total undiscovered oil and gas in the Arctic exceeds the total discovered amount of Arctic oil and oil equivalent natural gas (240bn barrels) - which in turn constitutes almost 10% of the world’s known conventional petroleum resources.  Under the United Nations Convention on the Law of the Sea (UNCLOS) countries have the right to exploit the oil and gas that could lie below the seabed of their continental shelves.  The information published in the USGS survey however contains a significant caveat: “No economic considerations are included in these initial estimates; results are presented without reference to costs of exploration and development, which will be important in many of the assessed areas”.  However, without a consideration of the potential cost of exploiting this resource, the public discourse has neglected the potential alternatives to chasing supply, with a presumption that extraction will inevitably proceed, regardless of cost.

14.  It is clear that extracting hydrocarbons from offshore in the Arctic will require substantial capital expenditure, high operating costs and will incur the significant risks of serious accident. Despite the on-going expectation of extraction, there remain significant questions about whether the risks and substantial costs involved in exploration and extraction in the offshore Arctic will be rewarded with profit. Ultimately, profit depends on how much oil and gas can be extracted and whether it can be profitably brought to market.

Will global oil prices support offshore Arctic drilling?

15.  Extraction offshore in the Arctic Ocean is considered by most analysts to be at the top end of the global oil production cost curve and, as such, would require sustained high oil prices to return a profit. There are real risks that oil prices in the 2030s and beyond would not sustain such ambitious projects.

Most analysts do not foresee oil extraction in the Arctic Oceans until the 2030s or beyond, if it were to occur at all. 

• Bernstein Research excludes any Arctic oil and gas extraction from its supply predictions for the next decade, noting that “development costs will be at the high side of the industry range” and “development times are likely to disappoint”[26].

• Similarly, Citi does not include any offshore Arctic projects in its list of over 300 global oil and gas projects in development or pre-development with likely start-up by 2020.[27]
• The IEA stated in 2012 that it did not expect to see a significant contribution to global oil supply from the US Arctic Ocean within the forecast period of its World Energy Outlook (WEO), which is to 2035.[28] 

The report cited, “technical and environmental challenges and high cost of operating in extreme weather conditions, including the problems of dealing with ice floes and shipping in water that remains frozen for much of the year”[29] as issues that would need to be overcome by either “technological advances and/or higher oil prices” for extraction to start.[30]

16.  The trajectory of global oil prices is currently subject to much debate. While the unprecedented rise in prices during the first decade of the twenty first century led to expectations of relentlessly climbing oil prices for years to come, a different scenario is emerging in the second decade. Since 2010, global oil prices have stagnated, albeit at a historically high level. Unrest in the Middle East led to some spikes, but the overall trajectory has been surprisingly steady with the price of Brent generally hovering around the $100–$105 per barrel mark at the beginning of 2011.

17.  In this context, it is significant that unpublished but available information including costs for exploiting this resource, also from the USGS, suggests a potentially different outcome, at least in the East Greenland Rift Basins – a region in the Arctic considered particularly promising for oil and gas extraction, with an estimated resource of 7.5 billion barrels.  The report [31] concludes extraction costs could be very high – from $100-$300 per barrel, implying that a high average oil price would be required.  If the average oil price was $100 per barrel – very near the current “break-even price” for current extraction projects across all provinces for new oil - only 2.5bn barrels of oil could be commercially extracted, with a 50% probability of success. 

18.  Even with an average oil price of $300 a barrel, only 4.1bn barrels could be expected to be extracted, again with only a 50% chance of success.  The high costs, as well as a high risk of failure, are significant deterrents to investment in the region, especially in the context of the potentially extremely high costs of responding to a major spill in the Arctic.  Additionally there is the risk of high cost, stranded assets, created by the development of alternatives to very highly priced oil, such as ultra- efficient internal combustion engines, hybrid and ultimately electric vehicles charged from renewable resources.  

Arctic Oil and Climate change

19.  While short to medium-term oil market dynamics currently appear to be highly volatile, it is the oil market of the 2030s and beyond that will govern whether high cost, capital-intensive offshore Arctic oil extraction will be profitable. This market will depend in part on highly unpredictable technological changes in transportation efficiency and the manner in which governments address global climate change. Preventing highly disruptive climate change – and certainly reaching the goal of keeping global temperature rise below the 2ºC threshold for catastrophic climate disruption, which is a stated objective both in UK policy and legislation – will necessitate reducing oil demand and result in lower oil prices. These changes would likely undermine extraction from expensive, remote and marginal oil fields such as offshore in the Arctic.

20.  As the figure below shows, the IEA expects drastically lower oil demand in a scenario in which governments take action to address climate change (450 Scenario). According to the IEA analysis, oil demand in the 450 Scenario would be some 23 million barrels per day less than in its New Policies Scenario, which assumes some action to improve efficiency but results in 3.6ºC of warming.

IEA estimates of oil demand and intensity by scenario (WEO 2013)[32]

21.  Furthermore, the IEA has pointed out that no more than one third of currently proven fossil fuel reserves can be exploited by 2050 in order to keep within the 2ºC target.[33] The agency also calculated that only about 45% of currently proven oil reserves would be exploited by 2035 in the 450 Scenario, while around 48% would be exploited in its New Policies Scenario.[34]

22.  No offshore Arctic oil or gas resources in the US have been booked as of today, and they are likely years away from being proven.

The only producing offshore site in the Arctic is Gazprom’s controversial Prirazlomnaya platform in the Pechora Sea.  Extracting oil in the offshore Arctic is clearly among the most expensive and risky prospects for oil extraction known today. If these resources were ever to become viable, it would likely only be in a scenario in which the world fails to control climate change – a scenario that even the IEA considers highly risky.

23.  Greenpeace recommends that UK Government conducts a formal analysis of the compatibility and consistency of its climate objectives as defined by the Climate Change Act; the potential global climate impacts of oil extraction in the Arctic in the context of rapidly changing oil demand scenarios and the potential impact on foreign policy objectives in order to remain a global leader in international climate policy.

Spill Risk in the Offshore Arctic

24.  Drilling conditions facing oil companies operating in the Arctic are some of the most challenging on Earth.  The hostile weather, freezing conditions and remote location, all present unprecedented challenges.  The depth of the territories claimed by Arctic nations governments - 1000-4000 m. -differ significantly from depths such as the shallow Pechora Sea where the first industrial oil rig is located (located within the exclusive economic zone of the Russian Federation). Here the depths are just tens of metres, or for example, the Barents Sea Shtokman gas field that is approximately 300m.

25.  Techniques for containing a spill and cleaning up after it are inadequate, essential strategic assets such as tugs and other equipment are far away and deployment is difficult or impossible, and the consequences of a spill for Arctic life are catastrophic.  To give an example, only a small part of the Deepwater Horizon spill of 200 million gallons (5 million barrels) was cleaned up, with reports of centimetres thick oil covering the ocean floor in 2010[35].  In the Arctic, clean-up is significantly more difficult, or impossible, due to fog, storms, months of darkness, strong winds, and broken sea ice.

26.  The consequences of a spill would be much more severe than in temperate waters: the Arctic is a critical habitat for endangered and threatened species which are already stressed, such as polar bears, whales, seals, and migratory birds.  It is clear that the oil industry is not prepared for oil spills in the Arctic. There is also no international liability and redress regime for oil spills from oil platforms, including in the Arctic. The lack of a liability and redress regime both from oil spills and for international waters is a major gap.

27.  The context in the remote US Arctic presents a useful example, if not an exact analogue of the global situation.  It contains almost all of the significant operating risks in the Arctic – limited accessibility due to storms, the presence of thick multi-year ice, a lack of daylight and the use of floating rigs rather than stationary concrete-reinforced structures. In its 2008 draft environmental impact statement for the Chukchi and Beaufort Planning Areas, the US Government estimated that there is a 40% chance of a large spill (over 1000 barrels) during the lifetime of exploration and extraction of oil in the Chukchi Sea.[36] The probability of small spills is close to 100% – as elsewhere, such spills are an accepted fact of oil companies’ operations. But in the Arctic they will be associated with more significant technical challenges and therefore higher costs.

28.  A spill would be most damaging if it occurred at the end of the drilling season when any response would be further impeded by ice. Limited access would mean oil companies would not have the long months that were available to those tackling the Deepwater Horizon disaster to find a solution to any major spill. So far, no analyses have been published quantifying the specific times during which response would be impossible in Shell’s lease areas in the Chukchi Sea. Comparable analyses, however, conclude that no response efforts would be possible more than half the time. For example, a study commissioned by WWF found that it would not be possible to respond to an oil spill in the Canadian Beaufort Sea for seven to eight months of the year. During the most favourable weather conditions (July–August), a response would only be possible 44–46% of the time, assuming that the infrastructure and workforce were readily available.[37]

Lack of appropriate technology

29.  “There is no comprehensive method for clean-up of spilled oil in sea ice”, according to US Geological Survey. Shell has acknowledged publicly that the usual techniques for controlling a spill (booms, dispersants, etc.) are of questionable efficacy in Arctic waters: “As these [ice] conditions develop, the efficiency of physical containment and recovery tactics will be reduced.” Joint Industry Programme research showed that oil weathered for more than six days in field conditions was un-ignitable and unrecoverable with mechanical devices. In situ burning was only a viable option for approximately five days after oil is spilled and that it is not effective at all in 30–70% ice conditions, reporting that “after six days the oil was so mixed with slush that both mechanical recovery and in-situ burning were evaluated as not effective.” Moreover, tests of response equipment conducted in the US Arctic Ocean in 2000 showed that boom and skimmers (machines for capturing oil on water) were ineffective in ice; the tests were deemed a “failure” as they were being carried out.[38]

30.  Even without Arctic conditions, the efficacy of mechanical response is limited, especially for any large spills.

After the Exxon Valdez oil spill, for example, an estimated 8% of the spilled oil was recovered using mechanical recovery,[39] and only 3% of the spilled oil was recovered using mechanical recovery after the Deepwater Horizon spill.[40] 

31.  In the Chukchi Sea, in the American Arctic, Shell’s worst case scenario planning for a well blowout is based on capturing 95% of the spilled oil – something that has not been recorded with any major spill. Shell assumes that mechanical recovery techniques will capture 90% of a major spill at the wellhead and half of what escapes before it reaches the shore.[41] US Government estimates, by contrast, state that “containment and recovery at sea rarely results in the removal of more than a relatively small proportion of a large spill, at best only 10 – 15 [percent] of the spilled oil and often considerably less”.[42] The government estimates are in line with recovery rates after the Deepwater Horizon and Exxon Valdez spills.

Lack of appropriate infrastructure

32.  Not only are there significant technological limitations on oil companies’ ability to clean up a spill, the infrastructure to mount a large-scale response simply isn’t in place. The US Coast Guard has admitted that no adequate infrastructure exists in the region. Admiral Robert Papp Jr, a senior Coast Guard official, said: “There is nothing up there to operate from at present... no way we could deploy several thousand people as we did in the Deepwater Horizon spill.”  Beyond the US Arctic, Lloyd’s of London in its report Arctic Opening concluded: “In many areas infrastructure is currently insufficient to meet the expected demands of economic development.”[43]

Distance, difficult conditions and limited transportation options would make it very difficult to bring response and rescue equipment and personnel to the Chukchi Sea.

33.  Wainwright, the closest village to Shell’s Burger prospect in the Chukchi, has fewer than 600 residents. It does not have an airport capable of supporting jet service and is not connected to any other residential centre by road or rail. [44] The nearest airport with regular jet service is Barrow, a few hundred miles to the east. Barrow has approximately 4000 residents.[45] It also is not connected to any other town or village by road or rail. The nearest major road system is in Fairbanks, more than 500 miles away as the crow flies.

34.  As in the rest of the Arctic, very little response equipment is stored on the US North Slope, and there are few vessels there that could assist in a response effort. US Senator Mark Begich (Alaska), for example, has pointed out that icebreakers are “sorely lacking” as well as Coast Guard “cutters, aircraft hangars, crew quarters, communication capabilities, deepwater ports and other infrastructure”.[46]

35.  As an example, in 2012, the Coast Guard conducted tests off Barrow in which it deployed boom and tested a skimmer designed to recover oil in pockets of water trapped by ice.[47] The Coast Guard report on the exercises notes that the lack of docking facilities or ports was a challenge.[48] The spill response equipment had to be trucked to Prudhoe Bay, then loaded onto a shallow draft barge, then transported to the Coast Guard boat offshore Barrow. This took nearly a week to accomplish.[49]  Challenges to respond in the remote Norwegian or Russian Arctic are likely to be similar or even more severe.

36.  Recent modeling commissioned by WWF from consultants RPS Applied Science Associates, Inc., to examine the outcomes of oil spills from a variety of scenarios oil spills originating in the Beaufort Sea.[50]  The report notes that “[the] Beaufort Sea is home to an incredibly rich diversity of species, including the tens of thousands of beluga whales that migrate there annually to feed and breed. The Beaufort Sea is one of the belugas primary Arctic summering areas, and plays a critical role in their ability to thrive long-term. Today, as it has for thousands of years, the bounty of the Beaufort Sea supports the livelihoods and culture of the Inuvialuit, Inupiat, and Gwich’in peoples in Canada and Alaska”. 

Key conclusions from the report include:

• Spilled oil surfaces rapidly and is easily trapped in sea ice, making it difficult to contain or clean up and spreading oil to areas far from the spill site.
• Spilled oil may travel considerable distances to the west and north of the spill site when trapped and drifting within sea ice, affecting habitat for a wide range of marine species.
• As a result of this spread of oil, coastal oiling could be an international issue – there may be a relatively high chance that oil spilled in Canadian waters could reach U.S. shorelines and affect communities there, as well as those in Canada.
• Use of chemical dispersants at deep-water blowout sites may create ‘toxic plumes’ of chemical residue to concentrate along the Beaufort shelf, an area that is home to a diverse range of species and essential to the health and productivity of Beaufort Sea ecosystem.

Significant policy gaps in current Arctic Governance institutions related to oil spills

37.  The Agreement on the Cooperation on Marine Oil Pollution, Preparedness and Response in the Arctic was agreed in May 2013[51]. This legally binding agreement was negotiated under the auspices of the Arctic Council, with the aim to strengthen cooperation, coordination and assistance amongst Arctic states in preparing for and responding to an oil spill. Operational guidelines were developed by the Emergency Prevention, Preparedness and Response working group.

This set of guidelines inspires no confidence that the Arctic Council is taking the risk of the inevitable oil spill offshore in the Arctic seriously:

• There are no worthwhile de minimis technical standards, no enforcement mechanisms (relying instead on members to “endeavour” to implement agreements) and the AC spends more time outlining how nations will reimburse support costs than designing a robust response strategy.
• The Arctic Council makes perfectly clear that the OPPR agreement shall only be implemented “subject to the capabilities of the Parties and the availability of relevant resources.”
• The agreement adds nothing to existing international law in order to hold oil companies strictly liable for the full costs of capping and mitigating an oil spill in the Arctic, just saying that “special attention shall be paid to international instruments and national law on liability and compensation for oil pollution damage.”

38.  In the Government response to the Second Report of Session 2012-13 - Environmental Audit Committee of the House of Commons Environmental Audit Committee report, it expressed support for the development of the highest environmental standards in the context of oil spill response.[52] The inadequacy of the current oil spill response measures as defined by the Arctic Council however indicates that there is no obviously defined norm for the highest standard in a context where major spills are almost inevitable, and when they do occur, are extremely difficult to clear up.

39.  As “best practice” is currently not defined, nor is an adequate standard in place, Greenpeace recommends that best practice would be to support the moratorium on drilling proposed by the House of Commons Environmental Audit Committee. Further contribution to the development of best practice would be to initiate an independent process to identify best practice across the Arctic region.

Industrial-scale Fishing

40.  The receding sea ice is also opening up Arctic fisheries, and with warming waters it is predicted that commercial fish stocks such as cod will increasingly move northwards and eastwards.  [53] Little reported commercial fishing in the high Arctic has occurred, though recent research shows that arctic fisheries from 1950 to 2006 were a staggering 75 times higher than the FAO have reported. The expansion of Arctic commercial fisheries is presently taking place on the Atlantic side of the Arctic Ocean rather than the Pacific side, as demonstrated by the Greenpeace exposé in 2010 and 2014 of Russian vessels fishing north of Svalbard. 

On the Pacific side, a US government moratorium on commercial fishing north of the Bering Strait has prevented exploitation in this region.

41.  In June 2010, the Greenpeace ship, Esperanza, documented this northward creep, encountering ten Russian trawlers at almost 80 degrees north on the northern west coast of Svalbard. Cod trawlers such as these drag their heavy gear across the seabed causing extensive damage to vulnerable marine habitats such as cold water corals and sponge fields. Such damage is known to have occurred further south in areas such as along the Egga Ridge and the sponge fields located on the Tromsø Bank. The marine habitats north of Svalbard are not well understood and poorly mapped and so it is not known what impact such fishing will have on the fragile and interlinked ecosystems of the Arctic Ocean. The Greenpeace expedition conducted a series of seabed surveys in the region using a drop camera and ROV and discovered that the seabed was not the lifeless muddy bottom suggested by some, but home to a myriad of marine life including sea urchins, sea stars, sea anemones, soft corals, sea squirts, tube worms, sponges, haddock, cod, red fish and shrimps[54]. In July 2014, the Esperanza encountered fishing vessels from the Barents fleet fishing east of southern Svalbard and some days later, documented two vessels transhipping their catch to a reefer flagged to St Kitts and Nevis moored within the national park boundaries of west Spitzbergen.

42.  Arctic fisheries management is currently based on bilateral arrangements between Arctic states and patchy (and debatable) coverage by several RFMOs such as the North East Atlantic Fisheries Commission (NEAFC).  In short, the current regime is fragmented and inadequate.  Under such arrangements opening up of Arctic fisheries to vessels that often use destructive fishing practices (such as bottom trawling) could lead to the rapid decimation of polar fish stocks and habitat destruction, with consequences for other Arctic life and the people that depend on the marine environment.

43.  The central Arctic Ocean is the last un-fished high seas enclave. All available science says the region is vulnerable to overfishing and may be slow to recover.  Depleting fish stocks in the area could threaten wildlife such as ringed seals and beluga whales dependent on the fish, as well as polar bears, which are indirectly dependent.

44.  Fortunately the central Arctic Ocean basin also offers an opportunity to protect an area before the fishery is destroyed.  The Pew Environmental Trust’s initiative, ‘Oceans North’ [55] has been working to protect the central Arctic Ocean basin from fishing for several years, and secured the support of over 2000 of the worlds’ leading marine scientists from 67 countries asking Arctic leaders to take action. Protecting the central Arctic Ocean fish stocks could also have spill-over benefits for the surrounding waters of the Arctic coastal states.

Shipping

45.  The melting Arctic ice is opening up new shipping routes such as the Northwest and Northeast Passages from Europe to Asia and Asia to North America. At this rate, in a not too distant future it will be possible for commercial vessels to use the Northern Sea route as a viable alternative to the Suez Canal cutting the journey time between some Asian and European ports by about one third. This also means that shipping companies could save huge amounts of fuel, avoid the tolls for going through the Suez or Panama Canal and eliminate the need to transit though high piracy areas like the Gulf of Aden or the Malacca Strait. So it comes as no surprise that there is strong interest in the commercial availability of these routes.

46.  There are however no binding arctic regulations which make it a safe shortcut for ships.  New access for shipping brings with it the risk of environmentally damaging impacts, the most obvious danger being an oil spill from a tanker.  Poor mapping, insufficient search and rescue capacity and the fact that there are no resources to deal with any form of spill mean that these new shipping routes are putting the Arctic Ocean, its wildlife, and the people who depend on them at risk.

47.  In spite of the Arctic Council’s Search and Rescue agreement[56], there is as yet no effective search and rescue system for the Northern Sea Route, so all arrangements need to be done on a vessel by vessel basis. Weather is challenging and will often delay passage. Icebreaker support is often needed and expensive.  Poor mapping of the hydrographic conditions adds to the risks and there is a clear need for better navigational charts.
 

48.  The International Maritime Organisation is currently in the process of developing a binding international framework known as the Polar Code, which is expected to be finalised in 2015. It hopes to cover a wide range of design, construction, equipment, operational, training, search and rescue and environmental protection matters relevant to ships operating in the inhospitable waters surrounding the both the north and south poles.

49.  However, the Polar Code does not restrict shipping access to the Central Arctic Ocean and it focuses primarily on safety and navigation and environmental groups have highlighted that its environmental protection provisions in their current form are rather weak[57].

Notably, whilst the Polar Code will phase in a ban on all discharges of oil and oil mixture, it will still allow ships to carry and use the most dangerous and polluting type of oil (heavy fuel oil) when transiting through the fragile Arctic environment.

50.  A heavy fuel oil spill is very persistent and may be carried by currents on and under ice over vast distances. It has been identified by the Arctic Council’s Arctic Marine Shipping Assessment (AMSA) as one of the major threats in the Arctic[58]. Switching to lower density oils for ships operating in Arctic waters would reduce such a threat.

51.  Since 2011 a new Regulation by the International Convention for the Prevention of Pollution from Ships (MARPOL)[59] prohibits cargo ships and passenger vessels from carrying and using HFOs in Antarctic waters and requires them to switch to a lower density fuel when transiting in Antarctic waters, but this ban does not apply to the Arctic. Moreover, the Polar Code does not cover a large number of important environmental issues such as air emissions from ships, including black carbon, discharge of grey water, the introduction of alien species and impacts on marine biodiversity such as ship strikes on marine mammals, disruption of migratory patterns, and underwater noise. In addition, some categories of ships will be allowed to operate without ice strengthening requirements and fishing vessels as well as ships under 500GT, which represent a large portion of the maritime traffic in the Arctic area, will at least initially not be bound by most safety requirements under the Polar Code. While some of these issues may be addressed in the future, considering the increasing pressure that commercial shipping will be posing on the fragile Artic Environment the current level of protection provided by the Code appears largely inadequate.

Economic Development and Environmental Protection in the Arctic 

52.  Clearly the communities in the Arctic will need to pursue a path to economic development, as well as preserving traditional livelihoods and lifestyles.  UK Government and private sector participation in development is welcome, but must be conducted in the context of developing a sustainable trajectory of development for local populations. It is impossible – and unwise - to speak of the Arctic in meaningful sense as a single entity or location – it is a huge and diverse area; however Greenpeace commissioned an extensive study[60] on the potential for sustainable development in Greenland – which came with these conclusions:

• Without offshore extraction of oil and gas, but with careful management, the sectors of tourism, fisheries, agriculture, as well as sustainably implemented mining projects, and the sustainable exploitation of seal products may potentially grow by 3.8% annually towards 2025 (total growth of 56%), creating lasting, locally-based jobs. 

• These sectors will be able to address the current and future social and economic needs in Greenland, and create permanent and locally based jobs in Greenland, which may to various degrees, within a relatively short time span, contribute to the economy.
• Economically, socially and environmentally sustainable development of society should be promoted through broad-based economic development which helps create a wide set of domestic capacities, jobs and lasting turnover. It is important that the society of Greenland increase private sector incomes as rapidly as possible in order to confront the current economic imbalance.
• Although the emerging sector of raw materials will be able to create growth and employment, it is unrealistic to expect this to underpin development in all parts of the country. Other economic sectors in Greenland, however, also hold considerable unexploited scope for growth.
• The country’s large and well-established fisheries sector, the existing tourism industry, hunting, agriculture and other activities offer opportunities for further development in coming years. They may thus contribute to meeting the socioeconomic needs of Greenland in the future.
• The commercial fishery is the second-largest sector in Greenland with an estimated turnover of DKK 3.7 billion. Commerce is the largest sector with a volume of trade of about DKK 4.7 billion. Turnover in tourism has been calculated at DKK 334 million, while raw material extraction amounts to DKK 522 million in 2010. The fishing industry is by far the most important economic sector in Greenland today, accounting for about 60% of all exports, which totaled DKK 4.2 billion in 2011. Unlike other sectors, turnover in fisheries is not generated by means of public funding, and the sector delivers a significant proportion of Greenland’s total income.

53.  Given the fragile nature of the environment in Greenland, balancing economic development with environmental protection in the Arctic will be a challenge. Results from a joint project  - For the Benefit of Greenland - between Copenhagen University and Ilisimatusarfik (Greenland University) [61] showed that resource extraction isn't necessarily a pathway to development, and perhaps surprisingly, development of offshore oil resources was not a short cut to development:

“It is estimated that Greenland’s offshore oil and gas potential in West Greenland can be compared with the total Danish production and reserves from the North Sea, and the potential off the coast of East Greenland is somewhat larger. The total potential is significantly less than the potential of Alaska, Russia and Norway. There are major barriers such as the lack of technology for the production and distribution of oil and gas from potential fields in Greenland, and gas exploitation is not expected to be profitable for a very long time.”

54.  In this context, it is also important to reflect that as highlighted above, peoples in the Arctic are extremely dependent on the natural resources - not only for food, but also for the entire economy.

In Greenland more than around 88 % of export revenues come from fisheries, so the impact of an oil spill would have an even more significant impact than in the UK or US, where there is a more diverse economy.

 Arctic Governance: what is the problem?

The current international governance and security arrangements are not appropriate for dealing with current and anticipated challenges in the Arctic. There are numerous legal instruments that could, in theory, go some way to protect the Arctic.  However, major gaps remain in the regulation of the most damaging human activities in the Arctic, which allow Arctic coastal states to exploit the Arctic Ocean. These gaps are significant and cannot simply be filled by the minor ‘tweaking’ of the legal or institutional framework.  Current instruments do not go far enough to ensure protection, there are significant shortcomings in the competence of existing institutions, while there is little or no cooperation and coordination between existing institutions where there is competence.

These gaps include[62]:

●       Few specific legally binding obligations on Arctic or other nations operating in the central Arctic, including agreements made within the Arctic Council;

●       No regulatory regime for activities including fishing; marine scientific research; bio-prospecting; laying of cables and pipelines;

●       No regulatory framework for transboundary environmental impact assessment;

●       No framework for cross-sectoral, integrated ocean management;

●       A dramatic under-representation of marine protected areas when compared to every other ocean, and no mechanism to establish them in the high seas;

●       A lack of global or regional rules, standards, and practices covering offshore hydrocarbon activities, shipping (IMO Polar Code not excepted), fishing, transport, etc.

●       No competent international organizations (other than OSPAR) to regulate numerous activities;

A global approach is needed to address these gaps; there is an urgent need to rethink the current governance structures and to generate the political will to address effectively the many shortcomings of the current system.

55.  To this end, Greenpeace has proposed an Arctic Sanctuary:  a highly protected area (or marine reserve) in the Central Arctic Ocean, beyond the 200 nautical mile limit of Arctic coastal states’ exclusive economic zones.

Within the Arctic Sanctuary there will be no fishing, and no exploration for, extraction of, or transport of hydrocarbons or other minerals from the seabed.  Strict environmental controls will apply to all shipping in this area, but not all shipping activity will be prohibited.  Heavy fuel oil use will, for example, not be allowed, a practice that is already adopted in Antarctic waters. This will not have an impact on traditional fishing and hunting.

56.  This region is technically defined as “high seas” under the United Nations Convention on Law of the Sea (UNCLOS), and is universally recognised as part of the global commons, the shared responsibility of the entire international community. Such a Sanctuary will fulfill some of the international commitments to establish a global network of marine protected areas and the Convention on Biological Diversity (CBD) mandated network of “areas where extractive uses are excluded, and other significant human pressures are removed or minimised, to enable the integrity, structure and functioning of ecosystems to be maintained or recovered”.[63]

57.  The size of the proposed Arctic Sanctuary is large: 2.8 million km2, roughly the size of the Mediterranean Sea, but still only a tiny fraction of the entire Arctic Ocean (14 million km2), lying beyond the traditional lands and waters of Indigenous Peoples’.

58.  The ‘gold standard’ of international environmental governance is a multilateral (i.e. open to all countries to sign) legally binding instrument, with sanctions to cover the whole of the Arctic marine region- both within and outside of EEZs.  The rationale for an agreement of this type is that the Arctic is an area experiencing radical environmental changes, that there are increasing opportunities and threats of global significance, and that it is difficult to see how the Arctic Ocean can be effectively managed without institutions dedicated to its protection[64].  Current governance regimes do not adequately protect the Arctic, or provide (non-Arctic) stakeholders with a say in managing the region.

A new treaty/framework must include the following elements:     

●       The precautionary principle, the ecosystem approach, and use the best available science;

●       Transparency, accountability and ensure full public participation of Indigenous Peoples and local communities and civil society;

●       An explicit mandate for the protection, conservation and sustainable use of the Arctic marine environment both within and outside areas beyond national jurisdiction, that would enable the development of mandatory approaches to limit certain activities;

●       Implementation tools, such as a mechanism to establish, monitor and control marine reserves (including a sanctuary in the central Arctic Ocean); and to undertake environmental impact assessments (EIAs) and strategic impact assessments (SEAs) also in areas beyond national jurisdiction;

●       Harmonisation and coordination among relevant instruments or regional, international and intergovernmental bodies;

●       A strong monitoring, control and compliance system for activities within EEZs and on the high seas

●       An institutional structure including a permanent Secretariat, a plenary, a scientific committee and a technical and compliance committee

●       Elements of modern international environmental law including dispute resolution mechanisms and avoiding veto and abuse of consensus requirements, such as by including opt-out clauses where necessary.

59.  The need for an agreement that is truly multilateral in nature is due to the fact that non-Arctic states have significant interests in the area because of its global significance in terms of biodiversity, unique ecology, critical role in the Earth System, and growing emergence as a global trading route.

60.  The advantage of a new legally binding treaty is that it is the most comprehensive approach to addressing the current inadequate legal framework covering the Arctic. It would ensure greater political commitments as well as raise the public profile of the challenges and needs of the region, it would formalise institutional and financial foundations, harmonise national approaches and provide for a dispute resolution.  

Conclusions and Recommendations

61.  In spite of the strong evidence for a precautionary approach to management of the Arctic region, UK policy as stated in Adapting To Change: UK policy towards the Arctic[65] to a large extent indicates an extractive agenda, citing activity back to the 1960s.  The baseline of scientific knowledge regarding the environmental agenda – on climate change, fisheries management and ocean chemistry, however has significantly changed since that time.

62.  The approach of the UK Government - with a policy on the one hand promoting the interests of oil companies such as BP and Shell, but also emphasising the importance of the views indigenous peoples and sound climate policy, leading to an international agreement to avoid dangerous climate change – is not coherent.

Greenpeace urges the UK Government to promote a more rounded agenda for the Arctic, which recognises its full range of strategic interests, above and beyond those of international oil companies based in the UK.  It will be essential for the UK Government to co-operate with Arctic states, such as Finland that are making significant efforts to support environmental protection and to promote the rights of indigenous peoples to both self-determination and development.

The UK should actively pursue environmentally ambitious agreements to address the issues identified above, where we believe international agreement and co-operation are needed to secure the future of the Arctic.  This includes ensuring that negotiations begin on:

• A new Implementing Agreement under UNCLOS to fill the current governance gaps with regards to the conservation and sustainable use of marine biodiversity on the high-seas, including the Central Arctic Ocean. Such an agreement has been supported by the EU for a number of years, with the UK government being an early champion of this approach. This issue is currently being addressed within the “UN Ad Hoc Open-Ended Informal Working Group to study issues relating to the conservation and sustainable use of marine biological diversity beyond areas of national jurisdiction” (BBNJ). At Rio+20 governments agreed to come to a decision on whether such an agreement is necessary by the end of the 69th session of the UNGA, i.e. by September 2015[66]. The UK government should play an active role, as part of the EU, to support the launch of negotiations for a new agreement as a huge step forward in biodiversity protection for the Arctic Ocean, but for the whole of the high seas.
• Adopting a precautionary approach to the management of Arctic fish stocks that takes into account the impacts on the wider ecosystem and exploring the options for achieving this.  As a first step, the UK should support the freezing of the current fisheries footprint by supporting the need for an immediate moratorium on industrial scale fishing in the historically un-fished waters of the Arctic, north of St Matthew Island and north of southern Svalbard including the high seas area of the central Arctic Ocean.  This would support the US government’s initiative to secure a moratorium on commercial fishing in the Arctic Ocean high seas[67]  amongst the five Arctic coastal states as well as reflect the European Parliament’s Resolution (clause 38) from March 2014.[68] This moratorium should stay in place until an effective oceans management system is in place.
• Securing binding rules on offshore oil and gas regulation, including agreement on a moratorium to offshore drilling until effective regulations are in place;
• Supporting the need for a legally binding framework specific to the entire marine area that ensures effective ecosystem-based management across all sectors, and is based on the principles of coordination, cooperation and precaution.  It also needs to ensure socio-economic benefits for present and future generations, in particular indigenous peoples in the region. This framework and coordinating function could be developed under the Arctic Council, with enough political will and adequate reform.
• Identifying and protecting areas of ecological and cultural significance, including the establishment of a sanctuary in the Central Arctic Ocean that has been identified as an area of ecologically or biologically significance by the CBD[69]. In the short term, countries should cooperate together using existing mechanisms and regulatory frameworks to protect these areas, eg. OSPAR etc, as part efforts to implement international commitments to create an ecologically coherent network of marine protected areas and reserves.
• Strengthening of environmental provisions within the IMO’s draft polar code to regulate polar shipping;

We urge the UK to review its current position and explore options for securing and integrating the various agreements outlined above, taking into consideration the experience gained from our involvement in the protection and management of Antarctica and the Southern Ocean.  While there are clear differences between the two poles, there are also clear parallels.  As with the Antarctic, a visionary approach needs to be adopted with respect to the Arctic environment that enshrines the ecosystem and precautionary approaches.  Securing peace and enabling science must be founding principles of future Arctic policy. What happens in the Arctic is of consequence to us all, and the highest level of international cooperation is required in order to protect the region for this and future generations.